Fact Sheet
page 1 of 4
Mutual Wills Agreements
By Ann Janssen and Kylie Costigan
My Will specifies who my beneficiaries will be, if my
spouse survives me, or if my spouse does not survive
me. Am I guaranteed that my testamentary wishes will
actually happen?
The short answer is ‘No’. You and your spouse are
both free to make a new Will at any time (during your
lifetimes or after one of you die) and on any terms,
unless you have a mutually enforceable agreement in
place. This ability to make a new Will at any time is
called ‘testamentary freedom’.
Example of testamentary freedom: Trina leaves everything to her husband Mark
in her Will on her death and, if Mark doesn’t survive her, then to their two daughters.
Four years after Trina’s death Mark makes a new Will to give all of his estate to his
new partner, Suzie. No inheritance automatically goes to Trina’s daughters. Trina’s
daughters would have to bring a family provision claim and such claims are
expensive and there is no guarantee of success.
WHAT CAN I DO TO PROTECT AN INHERITANCE GOING TO MY CHILDREN/OTHER
INTENDED BENEFICIARIES, BUT STILL PROVIDE FOR MY SPOUSE?
You have several options in this respect, which should all be thoroughly considered after
obtaining specialised estate planning advice. This is particularly so because a number of these
strategies require careful estate planning and you can use a combination of strategies to achieve
your purpose. Some strategies might involve the transfer of assets while you are living, which
may incur stamp duty, capital gains tax or other financial costs (such as affecting Centrelink
pensions etc) and other risks. Giving a life interest only in a property in your Will is another
strategy, but is restrictive and can have tax implications. Your circumstances, the pros and cons
of each strategy and your wishes all need to be carefully weighed before you implement anything.
One possible strategy is to prepare Mutual Wills together with your spouse.
WHAT ARE ‘MUTUAL WILLS’?
An agreement to make mutual wills is usually evidenced by a written agreement (in the form of a
contract or deed), typically between spouses, agreeing to make Wills in a certain way and stating
that you cannot change your Will after one of you die. Such mutual will agreements are very
inflexible because they do not allow the survivor any room to make testamentary changes to their
affairs, even though circumstances change.
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CITY OFFICE Lvl 20, HSBC Building, 300 Queen St, Brisbane, Queensland, Australia
TOOWONG OFFICE Lvl 10, Toowong Tower, 9 Sherwood Rd, Toowong, Queensland, Australia
P 1300 132 567 E [email protected]
www.estatefirst.com.au
Mutual Wills Agreements
Fact Sheet
(continued)
page 2 of 4
Estate First has recognised this problem and we have spent significant time designing an
innovative mutual wills agreement – we call it an MWD (Mutual Wills Deed). The MWD gives you
the opportunity to agree in writing on a number of aspects of your agreement and provides both
of you with certain flexibility mechanisms that you would come in handy in the future if your
circumstances change.
Estate First MWD (Single family unit) example: Trina and Mark make Wills
leaving everything to each other and then to their 3 adult children equally. Trina and
Mark also sign an MWD at that time. Mark and Trina promised in the MWD that
whoever died last would leave at least 65% of their wealth (determined at the date of
death of the survivor) to the 3 children. Trina dies. Mark can change his current Will
and reduce the children’s inheritance to anywhere between 65% and 100%. He
may wish to do so if he re-partners but the MWD will give the children the right to
make an equitable claim for the inheritance promised in the MWD (ie at least 65% in
this case) if Mark changes his Will and gives more than 35% to say, a second
spouse.
Estate First MWD (Blended Family) example: Stephen and Sharon are a couple
who each have children from former relationships. They own their main residence
(without a mortgage) together and have a small amount of cash at bank. Each have
superannuation of approximately $300,000. They feel that they need to provide
these assets to each other when one dies so the survivor can lead a comfortable
life. But they still want their respective children to receive an inheritance from their
share of the assets, when the surviving spouse dies. They settle on 50% to each
set of children in their MWD. Stephen dies and all his assets go to Sharon. She
then has an obligation (under the terms of the MWD) to provide at least 50% of her
wealth to Stephen’s children, in her final Will. She is free to leave the balance 50%
to whoever she wishes. Without this agreement Sharon could have legitimately
changed her Will and given all the wealth to her own children.
WHAT ARE THE ADVANTAGES OF THE ESTATE FIRST MWD?

Allows you to reach an agreement together regarding what is going to happen to your
wealth not only on the death of the first of you, but also after you have both died;

Allows you to each have access to your combined wealth to meet your needs during your
lifetimes, yet still providing some security for the ultimate intended beneficiaries that you
each seek to provide for on the death of the survivor of you;

Remarriage of the surviving spouse will revoke the Will but will not nullify the MWD. The
surviving spouse is required upon remarriage, to make a new Will in accordance with the
MWD;

If the surviving spouse breaches the terms of the MWD then the ultimate intended
beneficiaries (eg children) may bring a claim in equity against the surviving spouse or their
estate. Similarly, either of you may bring a claim if the other changes their Will without your
consent while you are both living. Whether a claim is successful always depends on the
Liability limited by a scheme approved under Professional Standards Legislation
CITY OFFICE Lvl 20, HSBC Building, 300 Queen St, Brisbane, Queensland, Australia
TOOWONG OFFICE Lvl 10, Toowong Tower, 9 Sherwood Rd, Toowong, Queensland, Australia
P 1300 132 567 E [email protected]
www.estatefirst.com.au
Mutual Wills Agreements
Fact Sheet
(continued)
page 3 of 4
facts of the particular case and the law at that time, but having an MWD evidencing your
testamentary intentions and promises may assist;

The MWD is often the preferred strategy where there are insufficient funds to provide for all
intended beneficiaries on your death (if you are the first spouse to die) and so you wish to
provide the bulk of your wealth to each other, but wish to still secure a benefit for your other
intended beneficiaries at a later date (i.e. when the survivor of you dies);

For beneficiaries in your MWD who are not eligible to bring a family provision claim, the
MWD may be their only avenue to make a claim; and

The MWD does not involve the immediate transfer of assets so does not incur stamp duty
and capital gains tax which other strategies involving such wealth transfer may incur.
WHAT ARE THE DISADVANTAGES OF A MWD?

We cannot predict the future and the MWD attempts to do this on the presumption that
some things will not change. For example, you might become estranged from an intended
beneficiary and have no more contact with them and yet you must continue to provide a gift
for them in your Will under the terms of the MWD, which might also mean that they receive
an equal proportion to other beneficiaries;
Example 1: under the terms of Peter and Shirley’s MWD, the surviving
spouse is to leave at least 60% of their wealth to their 3 children of their union,
John, Mary and Samantha, equally. Shirley dies and Peter becomes
estranged from John. Peter is still obliged to leave John 20% as a minimum of
his wealth.
Example 2: In the example above, Peter remarries after Shirley’s death to
Suzie. He wants to leave all of his wealth to Suzie when he dies. He is
restricted by the MWD to leaving Suzie a maximum of 40% of his wealth on
death.

The MWD restricts you and your financial behaviour to an extent, for the rest of your life;

There is nothing stopping the assets within the control of the surviving spouse from being
dissipated (due to poor investment decisions, indulgent spending, gambling, longevity etc)
and there being nothing left for the intended beneficiaries. The MWD cannot prevent a
property settlement on separation/divorce between the surviving spouse and any new
spouse, which again may diminish the property of the estate to be left under it;

A family provision application against the estate may still be made by the first spouse, or on
the death of the surviving spouse, by say, a new spouse. This could diminish the amount
available to be distributed to the beneficiaries in accordance with the MWD. However the
MWD is influential as a defence in such claims;
Liability limited by a scheme approved under Professional Standards Legislation
CITY OFFICE Lvl 20, HSBC Building, 300 Queen St, Brisbane, Queensland, Australia
TOOWONG OFFICE Lvl 10, Toowong Tower, 9 Sherwood Rd, Toowong, Queensland, Australia
P 1300 132 567 E [email protected]
www.estatefirst.com.au
Mutual Wills Agreements
Fact Sheet
(continued)
page 4 of 4

There can be ambiguity regarding the “reach” of the agreement. For example, if the
surviving spouse moves to another country/jurisdiction where the MWD is not enforceable
and all their assets are then held there, the tracing of those funds in an Australian Court
could be costly and ineffective; and

The MWD is not water-tight – there is always the possibility that an Agreement can be set
aside or is considered non-binding, if certain legal elements can be satisfied (such as
mistake, undue influence, uncertainty etc) or needs interpretation to determine what the
parties really meant. The Estate First MWD is yet to be tested by the Courts. Court
proceedings are costly with costs usually being borne by the side that loses.
WHAT DO I DO NOW…?
Contact us to make an appointment to discuss whether an MWD is right for you.
This information is general in nature and should not
be acted upon without first obtaining legal advice on
your particular situation. To find out more or to make
an appointment, phone us on 1300 132 567 or email
us [email protected]
Liability limited by a scheme approved under Professional Standards Legislation
CITY OFFICE Lvl 20, HSBC Building, 300 Queen St, Brisbane, Queensland, Australia
TOOWONG OFFICE Lvl 10, Toowong Tower, 9 Sherwood Rd, Toowong, Queensland, Australia
P 1300 132 567 E [email protected]
www.estatefirst.com.au